David Prosser: Enemies queuing to take a bite out of Apple
The treadmill on which Apple is running is travelling ever faster and the number of people who would like to shove it off isgrowing by the day
Thursday 03 March 2011
Outlook So happy birthday, Steve Jobs, who turns 56 today. Assuming the Apple boss has already taken delivery of a brand-spanking-new second-generation iPad, what about a copy of How to Win Friends and Influence People as a gift? For all its technical wizardry and marketing firepower, the world's second-largest company seems determined to keep making new enemies – and eventually its arrogance will catch up with it.
Yesterday's iPad 2 launch was yet another example of the way in which Apple has allowed its success to go to its head. Just about every other company in the world tells people when they are being invited to a new product launch. Apple simply announces it is holding an event, leaving people to speculate what might happen at it – while tacitly encouraging the fevered gossip on internet forums that is as powerful as the biggest of advertising budgets. The issues facing Apple – none of which does it seem prepared to confront – are more numerous than you might think.
Top of the list is the people problem. In addition to the question marks over who might succeed Mr Jobs should his ill health prevent a return to work – Apple has ridden roughshod over shareholders' attempts to pin it down on this – gossip persists about Jonathan Ive, its hugely influential British designer. Reports – not denied by the company – persist that Mr Ive wants to move back to the UK but has been refused permission to do so by his employer.
Then there are its business opponents. We know about Microsoft, whose executives Apple has been ridiculing in recent days over the row about whether it can trademark the term "App Store". But there are many more. Like Pearson, say, the publisher of the Financial Times, which this week warned it was investigating other platforms for its content, so cross is it about the subscription deal Apple has announced.
Nor should we ignore the technology community. Apple still has legions of followers – it would be silly to deny that – but there is something of a backlash going on too, with a growing number ofpeople complaining about Apple's "closed" systems – basically the fact its devices are so incompatible with devices made by anyone else. Apple started out as a counter-culture phenomenon, but has become ubiquitous – it is now a potential target for a new rebellion against the norm.
Will the iPad 2 be another stellar success for Apple? Almost certainly. But the countdown to the next big launch begins today – and then the one after that, ad infinitum. It is a treadmill that is running ever faster and the number of people who would like to shove it off is growing by the day. That is the fate of all successful companies to some extent, of course, but Apple seems intent on making itself more unpopular. Sooner or later it will fall off its perch.
ITV buys itself some time to modernise
Adam Crozier hasn't always found it easy to make friends, upsetting people in his previous two management roles at the Football Association and Royal Mail. For investors in ITV, however, Mr Crozier is one of the good guys – since he became chief executive last April, the shares have risen by one-third.
Let us give ITV's new boss his due. Within months of taking office, he presented a clear vision for transforming the company's strategy, announced a brave relocation in Manchester to the Media City site and overhauled the management team. Above all, he timed his arrival to perfection, with the recovery in the advertising market enabling him to announce a hugely improved trading performance.
These are early days, however. As Mr Crozier would be the first to admit, the bounceback in ITV's revenues is almost entirely a cyclical story and tells us little about whether he and chairman Archie Norman are on the right track with their plans for modernisation.
To turn Warren Buffett's maxim on its head, when the tide is in, you can't tell who is wearing swimming trunks. Or to put it another way, the challenge for Mr Crozier is to turn ITV into a business that is not plunged into crisis every time the advertising market slips.
The key is making more money across different platforms from digital, such a dirty word at ITV for so long following the disaster that was ONdigital. Mr Crozier has taken some baby steps, putting a number of its high-definition channels behind the paywall at Sky, the broadcaster that did such a devastating job of demolishing ONdigital a decade ago. Disappointingly, however, he hasn't signed up with Virgin Media yet
Still, while revenues from this venture will be modest, the significance of ITV's return to pay TV should not be underestimated. It was a platform rejected by previous managements yet offers the promise of stabilising revenues during good times and bad for advertising. Combined with a better online proposition, on which Mr Crozier has also begun to focus, in a world that will soon welcome YouView, this is crucial stuff.
Content is the other potential stabiliser. Here too, however, the work has barely started. Though there have been some winners, ITV Studios' financial performance actually deteriorated last year and the company admits it has not come up with an international entertainment hit since it launched Dancing on Ice five years ago. If it cannot do so soon, calls for it to purchase a proven independent will become louder.
The good news for ITV is that the advertising recovery has given the new management some breathing space – debt has been reduced and Mr Crozier has some time to fulfil his vision of the promised land.
Do not, however, make the mistake of thinking that this big increase in profits means ITV's problems have been fixed – the numbers are better, but the broadcaster is as yet no further down the transformation path than a few months ago.
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